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Franois Rochon
Publisher Sanjeev Parsad
Interview With
Franois Rochon
Years ago, my friend John
Zemanovich spoke to me
about his friend and
colleague Franois Rochon of
Giverny Capital. I did a little
research on Franois and
found his website, where I
read his annual report. His
results were impressive, but
his thought process was even
more compelling.
It's absolutely amazing how a
"deep discount, margin of
safety" investment
philosophy transcends
various backgrounds. A true
student of Buffett and
Graham, Franois has
converted himself from an
engineer by trade, into an
exceptional investment
manager with few equals.
Since July 1st 1993, he has
averaged 19.97%
compounded annually,
ending December 31, 2004.
Franois graciously agreed to
participate in an interview,
and it's my pleasure to
present it to the MSN
Berkshire Hathaway
evaluation of common
stocks. I found it at a used
book store in New York City
and paid $1 for it. Theres
also a very good chapter on
investing in the stock market
in J. Paul Gettys book:
How to be rich.
Hypothetical Question: Let's
say that you knew you were
going to lose all your
memory the next morning.
Briefly, what would you
write in a letter to yourself,
so that you could begin
relearning everything the
next day?
Read Warren Buffetts
annual reports on
www.berkshirehathaway.com
. It would then lead me to
Fisher, Graham, Munger and
lots of other great teachers.
How do you determine when
you've found a good
investment? Which factors
have the most weighting:
management, numbers,
price/value, general
economic performance, etc.?
I always start with the
numbers: last 10 years
revenues, profits, ROEs,
margins, etc. I compare with
similar players in the
industry. Sometimes, a
company stands out.
I then try to find out why.
What do they do that is better
than the others (do they have
a moat or not)? I read the
message of the CEO and
interviews with him. I then
try to figure out what the next